In the following balance sheet, estimate the impact on the economic value of equity (EVE). If interest rates of assets fall by 1% and deposit rates increase by 1%. EVE=$(     )Loan A(8%, 3 year)= $150 Deposit A(5%, 2 years)=$250  Loan B(11%, 4 years)= $200 Deposit B(7%, 3 year)= $100Total Assets = $350 Total Liabilities = $350   a. 16.44 b. 17.44 c. 18.44 d. 19.44

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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In the following balance sheet, estimate the impact on the economic value of equity (EVE).
 If interest rates of assets fall by 1% and deposit rates increase by 1%. EVE=$(     )
Loan A
(8%, 3 year)
= $150
 
Deposit A
(5%, 2 years)
=$250 

Loan B
(11%, 4 years)
= $200
 
Deposit B
(7%, 3 year)
= $100
Total Assets
 
= $350
 
Total Liabilities
 
= $350

 

a. 16.44


b. 17.44


c. 18.44


d. 19.44

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